Before the Uruguay Round, agriculture escaped the GATT discipline. It was included in Uruguay Round because farm subsidies in the United States and Europe reached record levels. The United States was adamant that an agreement had to be reached on agriculture in the Uruguay Round.
Europe and the United States began a subsidy war in agriculture during the 1980s. Each tried to expand market share and this reduced cereal and oilseed prices on the world market. Some commodities reached their lowest levels since the Great Depression. These low prices undermined small producers in the developing world by flooding markets with cheap imported food.
What happened to Agriculture during the Uruguay Round?
In the end, the USA and EU did not end subsidies. They agreed to a system of permissible subsidies, however. What used to be called export subsidies came to be called direct payments and are not subject to WTO discipline.
Developing country issues were not addressed. The prices for tropical commodities continue to be severely depressed. In general, food security was sacrificed by southern countries governments during the negotiations to favour commercial exporters instead.
Apart from encouraging environmentally degrading practices, the people dependent upon these industries face severe problems of low wages, poor working conditions and repression of their democratic rights when they object.
Why were textiles and clothing included in the GATT negotiations and what was the result?
Previously, the multi-fibre agreement protected industrialised countries markets from developing countries imports. The MFA was a non-tariff barrier that is sanctioned and administered by the GATT. Industrialised countries committed themselves to phasing out the MFA.